Back to top

Image: Bigstock

Adtalem Global (ATGE) to Post Q4 Earnings: What to Expect?

Read MoreHide Full Article

Adtalem Global Education Inc. (ATGE - Free Report) is scheduled to report fourth-quarter of fiscal 2022 results on Aug 11, after the closing bell.

In the last-reported quarter, this leading healthcare educator’s earnings missed the Zacks Consensus Estimate by 1.1% but grew 45% year over year. Total revenues surpassed the consensus mark by 0.9% and increased 58.8% year over year.

Adtalem’s earnings missed the consensus mark in three of the last four quarters and met on the other one occasion, with the average negative surprise being 9.8%.

Trend in Estimate Revision

The Zacks Consensus Estimate for fiscal fourth-quarter earnings has remained unchanged at $1.28 per share over the past 60 days. The estimated figure indicates 82.9% increase from the year-ago earnings of 70 cents per share. The consensus mark for revenues is $347 million, suggesting 23.8% year-over-year rise.

Factors to Note

Lower enrollment owing to the pandemic-related challenges is expected to have weighed on ATGE’s performance. Nonetheless, the Walden acquisition along with focus on operational efficiency and realization of cost synergies related to the Walden integration may have offset the negatives.

Adtalem’s post-licensure nursing programs, strategic focus, significant scale and buyout synergies have positioned it well in helping the healthcare industry meet its critical workforce talent needs. The company’s health care and international institutions have shown significant improvement in revenues and profitability since fiscal 2013. In sync with this, Adtalem completed the divesture of its Financial Services segment to a consortium of Wendel Group and Colibri Group for $1 billion in cash during the last-reported quarter. This might have helped the company to enhance its focus as a pure play, a leading provider of talent to the healthcare industry, thereby helping to generate higher profit in the quarter-to-be reported.

Also, to address increasing cost pressure, Adtalem has been carrying out cost-saving initiatives like workforce reduction, centralized operations and curbing discretionary spending through supply management. The company is following a strict cost-control routine, with special emphasis on controlling and escalating costs at some of its institutions. Notably, the company has been deleveraging the balance sheet and returning capital to shareholders to improve its operational efficiency.

Overall, the above-mentioned actions should provide additional liquidity and reduce interest costs, thereby enhancing operational and strategic flexibility and boosting profit level.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for ATGE this time around. That is because a stock needs to have both, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), for this to happen. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: ATGE has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

A Look at Some Recent Consumer Discretionary Releases

Mohawk Industries, Inc. (MHK - Free Report) reported mixed results for second-quarter 2022, with earnings surpassing the Zacks Consensus Estimate but net sales missing the same. On a year-over-year basis, net sales grew buoyed by higher pricing, enhanced product mix and improvements in commercial and acquisitions.

However, MHK’s earnings fell from a year ago due to material, energy and transportation inflation.

Strategic Education, Inc. or SEI (STRA - Free Report) reported second-quarter 2022. Quarterly earnings and revenues missed their respective Zacks Consensus Estimate and declined on a year-over-year basis.

The downside was caused by lower contributions from all three segments of STRA.

Royal Caribbean Cruises Ltd. (RCL - Free Report) reported solid second-quarter 2022 results, with earnings and revenues beating the Zacks Consensus Estimate and rising year over year.

RCL is expected to generate 65.1% earnings growth in 2022.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Published in